Bitcoin (BTC) Price Analysis: Can Bulls Sustain This Upside Move?
Bitcoin was previously consolidating inside a symmetrical triangle pattern on its short-term time frames. Price broke above the triangle resistance, which happens to be the mid-channel area of interest on the longer-term charts.
The descending trend channel on the 4-hour time frame is still intact and bitcoin looks ready for a test of the resistance around $6,800. A break above this could confirm that bullish momentum is building up and that a reversal from the downtrend is taking place.
However, the 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. This signals that the selloff is more likely to resume than to reverse. Also, the 100 SMA lines up with the top of the channel, adding to its strength as resistance.
RSI is on the way up but has dipped into overbought territory to signal weakening bullish pressure. Turning lower could draw sellers back in while buyers take a break. Stochastic has a bit more room to climb so buyers could stay in control until the resistance is tested. A break past this could lead to a test of the 200 SMA dynamic inflection point around $7,200.
The recent jump is being attributed to the approval of New York’s Department of Financial Services to Square’s “Cash” mobile payments app. This allows clients to trade the cryptocurrency in the state and has 7 million monthly active users.
Prior to this, Phillip Nunn, chief executive officer of Manchester-based investment firm Blackmore Group, reiterated his forecast that bitcoin could hit $60,000 by the end of the year. He stated:
“The prediction was based on, first of all, market volatility which we’re experiencing at the moment; I think that’s really apparent. I absolutely stand by my prediction.”
He clarified that movements are mostly spurred by market sentiment but that the industry is still small that price manipulation is possible.